How Much Will Magento Cost Your Business?
Magento is a powerful software designed to handle large ecommerce businesses. Below are Magento’s three packages along with the total price you can expect to pay for your website:
- Magento Open Source ($15,000+)
- Magento Commerce ($22,000+)
- Magento Commerce Cloud ( $40,000+)
The cost of using Magento Open Source typically starts from around $15,000. This price comes from things like web hosting, extensions, and hiring developers to help code your site or fix issues.
If your business generates under $1m gross sales revenue, then Magento Commerce will cost you approximately $22,000, while Magento Commerce Cloud will cost around $40,000. The higher your revenue, the more you pay (more on this later).
This article will explain Magento’s pricing in more detail, helping you fully understand how much you’ll need to spend.
The Magento monthly cost can get confusing when discussing this edition, but we’re here to explain it all.
Magento Open Source is free to install, but you’ll need to pay for your hosting, domain, and security, plus any web development help you need if you don’t have the time or skill level required to customize your site the way you want.
Typically, you’re looking at spending $15,000+ overall for a basic Magento Open Source website.
Magento Open Source Features
Below are some of the best features you get with Magento Open Source:
- Product variants – add variants to your products such as color, fabric, or size, allowing your customers to set filters with their preferences
- Mobile-optimized email templates – send emails that look awesome on all screen sizes
- Google Universal Analytics – gain deeper insights into the behavior of your customers and tailor your approach to maximise profits
Formerly known as Magento Enterprise, the Commerce edition is more suited to enterprise-sized businesses than the Open Source edition, providing more advanced functionality. It’s a good choice if you have a very large ecommerce site that you’re really serious about – and there’s never been a better time to get serious. According to one survey, 61% of consumers expect to spend more time online after the pandemic than before.
Unlike the Open Source edition, the Magento Enterprise pricing is based on your gross sales revenue. Below is a table showing how much you’ll need to pay for the Magento license, which depends on your annual revenue.
|Average Gross Sales Revenue||Magento Commerce Cost|
|$1,000,000 - $5,000,000||$32,000/year|
|$5,000,000 - $10,000,000||$49,000/year|
|$10,000,000 - $25,000,000||$75,000/year|
Magento Commerce Features
Below are some of the best features to help your enterprise business scale:
- Customized promotions – create personalized promotions to help increase the rate of your conversions.
- Drag-and-drop CMS – use the built-in content management system’s drag and drop feature to easily customise your content.
- Customer loyalty tools – create exclusive private sales events and wish lists, and offer rewards points.
- Visual merchandising – organize products on your catalogs by categories such as ‘popular items’ to help improve the user experience.
Similar to Magento Commerce, the Cloud edition is only for large businesses handling huge amounts of sales. Instead, all your data is backed up in the Cloud, rather than on a hard drive that can be lost or stolen. Along with some other features which we’ll explain below, it’s for these reasons it’s slightly more expensive than Magento Commerce.
|Average Gross Sales Revenue||Magento Commerce Cloud Cost|
|$1,000,000 - $5,000,000||$55,000/year|
|$5,000,000 - $10,000,000||$80,000/year|
|$10,000,000 - $25,000,000||$120,000/year|
Magento Commerce Cloud Features
Check out Magento Commerce Cloud’s top features below…
- Fast page loading – Magento’s Content Delivery Network will kick into gear when your site experiences high volumes of traffic on days like Black Friday.
- Realtime performance monitoring – make changes to your site in real time and avoid missed sales.
- Automatic infrastructure updates – have your site seamlessly updated with the latest Magento Cloud software enhancements.
The overall Magento pricing comprises various factors other than the licensing fees. Below are the most important costs to factor in when budgeting for your new website…
Web Hosting ($14.99 – $39.99/month)
Being an open-source software, web hosting is the first non-negotiable cost you’ll encounter with Magento Open Source. From our in-depth hosting research, we confidently recommend SiteGround for powering your Magento store. Among other reasons, it’s one of the only hosting providers offering automatic Magento installation. For this reason, we’ll discuss SiteGround’s shared hosting price plans below.
Magento is best suited to large online stores, so we’d recommend the GoGeek plan. It’s able to support up to 100,000 unique monthly online visits and offers priority support to help keep your enterprise-sized website running smoothly.
SiteGround also offers a 30-day money back guarantee, so you can easily try it out risk-free.
Domain Cost ($10 – $20/year)
You’ll also need to consider the cost of your domain, i.e. the URL for your online store. A new domain will cost somewhere between $10 and $20 per year, depending on how popular your domain name is and the registrar you use.
SSL Certificate Cost ($0 – $600/year)
The Secure Sockets Layer provides protection for your online store. It encrypts the sensitive data passed between your customers and checkout system e.g. the credit card details.
By signing up with SiteGround to power your Magento store (which is what we strongly recommend), you’ll get a free SSL certificate on every SiteGround hosting plan. Otherwise, you’ll need to spend roughly $50 – $600 per year, depending on your SSL certificate. One less cost to worry about!
Magento Developer Cost ($65 – $150/hour)
The hourly rate for Magento developers will depend on the experience of the developer, but you’re usually looking at spending between $65 and $150 per hour. The amount you pay will depend on the size of your project, e.g. whether you need a few quick fixes in the backend or you need your whole site to be migrated from another platform to Magento.
Themes ($17 – $5,000+)
You can choose from a ready-made Magento theme which costs anywhere between $17 and $399 (although the average cost is around $100), or you can customize your own theme.
The latter option could cost anywhere between $600 and $25,000, depending on the Magento web designer you hire, and your requirements. Typically, you’re looking at $5,000 for a custom theme.
Extensions and Add-ons ($0 – $2,000+)
The cost of each extension will depend on the development agency that created them. They range from free to $2,000+ (the more expensive options usually come with additional software).
There are almost 2,000 free extensions available, while a third of them cost around $90, and 10% of them cost less than $30.
Payment Fees (2% – 4% per transaction)
In order to accept payments online, you’ll need to pay transaction fees to the payment gateways you’re using. These typically cost between 2% and 4% per transaction, and you’ll also need to pay to install many of the gateways.
The total Magento cost depends on the edition you use. Let’s quickly recap the total costs you might expect to pay for each one in total on average:
- Magento Open Source ($15,000+ )
- Magento Commerce ($22,000+)
- Magento Commerce Cloud ($40,000+)
The cost of Magento Commerce and Commerce Cloud is dependent on your gross annual revenue, so you can expect to pay more if your sales are through the roof. On top of these estimates, you’ll need to pay for things like domains, extensions, and web development help if you don’t already have a team of developers in-house.
As you can see from the Magento pricing estimates above, this platform is only suitable for large enterprises that have the budgets to accommodate the costs above. The Open Source edition is suitable for medium-sized businesses, however, but we’d recommend only very large companies use the Commerce and Cloud options.